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us stock market, trade stock
Begin Part 2 of 2
Support and Resistance
Nasdaq: Closed at 1918.54.
Resistance: The 200 day MVA at 1931.39). 1934 to 1941, the tops of the trading range it has fallen back into. Then 2000 and the up trendline is at 2015.
Support: The 50 day MVA (1884.54). 1875 (the November gap up point and prior price points.
S&P 500: Closed at 1139.93.
Resistance: 1150 (former price consolidations). The March 2000 down trendline at 1145. Then the December high at 1173.62. The 200 day MVA 1169.59. The up trendline is at 1175.
Support: 1125, former price consolidations, and the 50 day MVA (1127.59). After that, 1100 is next (top of the October consolidation range).
Dow: Closed at 9985.18.
Resistance: 9992 to 10,000 could be, but have not been holding either way with much vigor. The 200 day MVA (10,106.89). The up trendline at 10,110. The December high is at 10,169.44.
Support: The 50 day MVA is at 9759.36. After that, 9500.
Weekly Economic Calendar (All times Eastern). The figures are the consensus expectations, not ours.
12-18-01
Housing Starts, November (8:30): +8.2%. 1.645M actual versus 1.525M expected and 1.521M prior (revised from 1.552M).
Building Permits, November (8:30): +5.3%. 1.564M actual versus 1.470M expected and 1.485M prior (revised from 1.473M).
12-19-01
Trade Balance, October (8:30): -29.4B actual versus -$27.5B expected and -$19.0 prior (revised from -$18.7B).
Leading Indicators, November (10:00): +0.5% actual versus 0.2% expected and 0.1% prior (revised from 0.3%).
12-20-01
Initial Claims, 12/15/01 (8:30): 384K actual versus 394K expected and 395K prior.
Philadelphia Fed, December (12.00): -5.5 actual versus -17.5 expected and -20.2 prior.
Treasury Budget, November (2:00): -$54.3B actual versus -$47.5B expected and -$23.7B prior.
12-21-01
Personal Spending, November (8:29): -0.5% versus 2.9% prior.
Personal Income, November (8:30): 0.0% versus 0.0% prior.
GDP - Final, Q3 (8:30): -1.1% versus -1.1% prior.
Chain Deflator - Final (8:30): 2.1% versus 2.1% prior.
Mich Sentiment - Rev., December (9:45): 85.7 versus 85.8 prior.
SUBSCRIBER QUESTIONS
Q: I read that on Dec. 24th, ARBA along with some others will no longer be on the Nasdaq 100. Could you please tell me if it will still be trading in the Nasdaq or someplace else if it will be trading at all. Thank you.
A: Those stocks being removed from the Nasdaq 100 to make room for the new group will still trade on the Nasdaq, but will not be factored into the Nasdaq 100 moves. Some of those being added are familiar names: IMCL, CDWC, SYMC, PDLI, SNPS, SEPR, IVGN, ESRX, CEPH, ICOS, CYTC, IDTI.
TEAM TRADES
AZO is on the SSR, and it has been very good to us over the months. Right now it is in another tight, flat consolidation above the 10 day MVA. This stock tends to bound up off of the short term moving averages after trading in tight, flat ranges for several sessions. Today the stock broke over 75, the high in the recent consolidation with a bit higher volume after some very low volume sessions. Whenever we see volume pick up after these low volume consolidations, we take notice. We took some partial positions today when it made this move even though it did not close above the 75 level. We will keep watching this leader for other volume spikes, hopefully higher, to take positions for the next move up.
When the Nasdaq broke below the 200 day MVA, we sent out an alert to the alert subscribers. When it tested the breakdown and started to fail, we issued an alert on the QQQ for some January 48 strike options. Very good delta (-.98), and would almost give us a tick for tick gain down to 36 (our initial target). They were trading at 8.90 by 9.10, and because these are so liquid, we put in an order at 9.00 because the index was still equivocal, i.e., the Nasdaq was moving up and down right below the 200 day MVA, preparing for the fall. When it moved up the bid and ask changed in a flash, and the fill was made. The index traded a bit higher, but could not break back up over the level and fell at the close. The options closed at 9.20 by 9.30.
THE PLAYS:
Good movers: AUDC continues to hold support in the ascending wedge pattern, and volume was quite low Thursday. See the Tuesday report for buy point. DRRX showed a hammer doji on rising volume at the base of the handle. Could get a move up. Most of the stocks on the report are holding up, with a few exceptions (COHU, SANM, XLNX, CHKP, KLAC). VRTS is on the verge of falling; see below.
Continued Play:
MANH (Manhattan Assoc--$27.91; -1.12; optionable): Software
http://biz.yahoo.com/p/m/manh.html
STATUS: Opened again just under the 50 day MVA (29.37), then sold back with volume rising (325,900; avg. 567,000) to the 200 day MVA, tapped on the low of 27.43. The stock bounced slightly, but after closing near the low we may get that break of the support, for the move down to our target at 22.50 to 20.
BUY POINT: 27 on continued rising volume.
POSITION: January $40 puts to buy (MQR MH).
http://www.investmenthouse.com/ct/manh.html
VRTS (Veritas Software--$41.75; -2.14; optionable): Application Software
http://biz.yahoo.com/p/v/vrts.html
STATUS: VRTS closed just under its 18 day MVA (41.89) on stronger volume (13 million; avg. 15.6 million). If the selling picks up steam, the stock can drop to its 50 day MVA at 37.96, for a quick downside play. The stock closed just below the up trendline that connects the October and December lows.
BUY POINT: 41.65 on 16 million or higher volume.
POSITION: January $50 puts to buy (VIV MJ).
http://www.investmenthouse.com/ct/vrts.html
New:
Puts:
TER (Teradyne--$28.21; -1.56; optionable): Semiconductor
http://biz.yahoo.com/p/t/ter.html
STATUS: Sold down to the 50 day MVA (27.95) on a sharp rise in volume (to average levels at 3.17 million) as the chips sold. On a break of the moving average on continued selling, TER can drop to the 24 range for an initial target, if not down to the 22.50 range.
BUY POINT: 27.85 on volume in the range of 3.2 million or higher.
POSITION: January $32.50 puts to buy (TER MZ).
http://www.investmenthouse.com/ct/ter.html
LLTC (Linear Tech--$39.44; -2.70; optionable): Semiconductor
http://biz.yahoo.com/p/l/lltc.html
STATUS: Broke the 50 day MVA on high volume (shot to 8.2 million; avg. 5.9 million) as the chips sold back. Looking for a drop to the 35 range; watch the November low at 36.75 for possible support on the way down. LLTC broke the 200 day MVA on Wednesday on stronger, average volume before the bigger drop today. We will see if it has more downside.
BUY POINT: 39.30 on continued strong volume.
POSITION: January $50 puts to buy (LLQ MJ).
http://www.investmenthouse.com/ct/lltc.html
CLS (Celestica--$38.69; -3.86; optionable): Hardware
http://biz.yahoo.com/p/c/cls.html
STATUS: Has dropped for 2 days, but today broke the 50 day MVA (40.86) on much higher volume (5 million; avg. 2.5 million). Looking for a move down to the 34 range for an initial target.
BUY POINT: 38.50 on continued rising volume in market selling.
POSITION: January $50 puts to buy (CLS MJ).
http://www.investmenthouse.com/ct/rfmd.html
New upside:
DIAN (Dianon Systems--$56.90; +0.58; optionable): Health Services
http://biz.yahoo.com/p/d/dian.html
STATUS: DIAN made the nice breakout from its rolling pattern.flat base over a week ago and is now testing the breakout. Volume remains high though lower than that on the breakout (down Thursday to 263,100; avg. 195,000), and DIAN is holding about the July, August and October tops (55.20 at the highest), and the 10 day MVA at 55.02. DIAN may pull back to the 10 day, but has been holding up well in the test, and today moved up slightly from the most recent support just over 56. Will watch for a strong move back up either from here or the 10 day. Money flow and buying excellent. Target: 69
BUY POINT: Aggressive from here: 57.20 on rising volume. Stop: 53.20 (7%). From the 55 range: 56.50 on strong and rising volume. Stop: 52.55 (7%)
POSITION: Stock and/or February $50 calls to buy (UID BJ).
http://www.investmenthouse.com/ct/dian.html
For a review of frequently asked questions, please use the link below:
http://www.investmenthouse.com/1questions.htm
Investment House subscribers are offered a special from eSignal for those interested in a realtime service. Contact:
Ray Fitzgerald
Account Executive
800-322-0940
Office hours 6:30-3:30 PST
rfitzgerald@esignal.com
Good Investing!
Jon L. Johnson and the Technical Traders Team
All of the foregoing is commentary for informational purposes only. All statements and expressions are the opinion of Online Investment Services, LP or its paid consultants and are not meant to be a solicitation or recommendation to buy, sell, or hold securities. We are not licensed or registered in the securities industry. The information presented herein and on our related web site has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. The security portfolio of Partners of Online Investment Services, LP or its paid consultants may, in some instances, include securities mentioned herein and on our web site. Estimates, assumptions and other forward-looking information are subject to the limits of forecasting. Actual future developments may differ materially due to many factors.
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